Discussions in Retail: Some Thoughts on Hot Button Issues

A lot has changed on the retail front. The economy, the environment, the Internet...they aren't just stealing headlines, they are also impacting bottom lines. Ipsos' Peter Milic gives his perspective on a number of these critical issues and how they relate to retail.

Peter is a Senior Vice President with Ipsos Reid, the Canadian division of Ipsos, and is based in Toronto. Peter is part of Ipsos' global team of researchers focused on developing and executing research tools that serve the needs of both the Retail and CPG sectors in their quest for Shopper Insights.

Addressing the growing thirst for shopper understanding, Peter is a regular contributor to the Retail Wire BrainTrust Blog. Here are some recent discussions Peter shared with the blog readers.

The Economy...Are Shoppers Ready to Shop?

Last fall, the economy began to splinter and crash and with it, people reacted by cutting back and tightening belts. But nearly a year later, is there evidence that consumers are growing weary of pinching pennies and are eager to spend?

When I saw this topic, the first thing I wondered was how many times will this question be asked over the next few months. Every metric that we use to measure a phenomenon such as intent to spend, consumer confidence does not straight-line forever. When the air goes out of a balloon, the force at which it dissipates may diminish, but the fact remains that the balloon is flaccid. Many consumers have seen their nest eggs vanish overnight as people who lost their jobs were forced to use up their savings. Those close to retirement have seen their nest eggs vanish as a result of irregularities in the equity markets.

Clearly, we all need to replace things and to spend on ourselves to make life enjoyable, but will things ever return to the way they were?

My final thought on this relates to my parents. They lived through some very difficult economic times. This memory of the difficult times stayed with them forever and their spending habits reflected a degree of frugality that was not necessary.

The Environment: Will new bag laws discourage big basket sizes?

There has been a recent backlash against the common plastic bag. The City of Toronto went so far as to enact a new law requiring companies that use plastic bags in a retail capacity to charge consumers a minimum five cents per bag. Other communities across North America are considering similar tactics. Will the trend of charging for bags act as an obstacle in building bigger baskets?

PM:

It is often the case with an initiative requiring (rather than encouraging) consumers to change entrenched behavior there will be initial resistance and over statement of response. In this instance, I have every reason to believe that the impact will be inconsequential and short lived. Loblaw Companies Ltd. (a Canadian chain of supermarkets) chose to comply with the new by-law well ahead of the required implementation date.

The more important issue here is whether this decision to act in advance of its competition will be perceived by customers as demonstrating commitment to the environment or be seen as a short term cash grab.

During the six month period that Loblaws is the only major grocery chain charging 5 cents per bag, will its customers opt to shop elsewhere? Once all retailers comply, there will be no competitive advantage or disadvantage. Finally, if the basket size does shrink, does that mean we will eat less or spend more money on gas to grocery shop more often? Definitely not.

The Internet: Social Networking - Where's the Bottom?

An excellent opportunity to connect with consumers? Or too much information with questionable value? Do social networking sites such as Facebook and Twitter offer any benefit in reaching consumers, or are they too unwieldy as a communication tool?

No marketer can afford to overlook opportunities to communicate with consumers. Media fragmentation has made it essential that social networking tools be considered when designing a communications program, especially when targeting young adults. I would not use the word unwieldy to characterize social networking tools, instead I would use the phrase "uncontrollable".

Unlike the media that marketers have used in the past, these new tools do not afford control. If what you have to say offends or upsets someone, it is possible for individuals who are bothered by what is being said to turn the table. Marketers have always been very sensitive to criticism. Using tools that encourage commentary and response will oblige marketers to be more cautious and to have thicker skin.

Are you a retail marketer needing new ideas and relevant discussion on the topics that matter to your business? Check out the RetailWire website or contact your Ipsos representative for information on our research services for retailers.